Forward-Looking Statements
This report contains forward-looking statements. The statements regarding
Newpoint Financial Corp. contained in this report that are not historical in
nature, particularly those that utilize terminology such as "may," "will,"
"should," "likely," "expects," "anticipates," "estimates," "believes" or
"plans," or comparable terminology, are forward-looking statements based on
current expectations and assumptions, and entail various risks and uncertainties
that could cause actual results to differ materially from those expressed in
such forward-looking statements.
Important factors known to us that could cause such material differences include
uncertainties associated with the following:
? Inadequate capital and barriers to raising the additional capital or to
obtaining the financing needed to implement our business plans;
? Our failure to earn revenues or profits;
? Risks associated with potential acquisitions, including increased operating
expenses and cash requirements. assimilation of operations, intellectual
property and products of an acquired Company, and
? Lack of an active trading market for our common stock;
We undertake no obligation to correct or update any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required under applicable law. You are advised, however, to consult any
future disclosures we make on related subjects in future reports to the SEC.
Overview
Newpoint Financial Corp., a Delaware corporation (the "Company," "we," "us," or
"our") is a holding Company that strategically invests primarily in regulated
entities such as banks and insurance companies. These investments may be result
in us acquiring a controlling or non-controlling interests of these entities. To
date, we have entered into three such transactions (one of which has closed): in
December 2021 we acquired a 10% interest in Novea, Inc., a financial and
insurance services software Company; we have also entered into an agreement for
the acquisition of an interest in American Millennium Insurance Co., a New
Jersey based insurance Company through purchase of shares of its parent holding
companies. Closing is subject to receipt of regulatory approvals and other
customary closing conditions.
Since our current investments (one of which has closed) constitute (or will
constitute) a minority interest in these companies, we anticipate that our
income will be dependent on the ability of these companies to generate revenue
and payment of dividends.
Critical Accounting Policies
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires us
to make estimates and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Certain of the Company's accounting policies that we believe are the most
important to the portrayal of the Company's financial condition and results of
operations and that require management's subjective judgments are described
below to facilitate a better understanding of our business activities.
Management bases its judgments on its experience and assumptions which it
believes are reasonable and applicable under the circumstances.
We expect that uncertainty and volatility in financial markets relating to the
COVID-19 pandemic will continue to impact the Company. The scope, duration and
magnitude of the direct and indirect effects of the COVID-19 pandemic are
changing rapidly and are difficult to anticipate.
We are subject to economic factors such as interest rates, inflation, foreign
exchange rates, adverse reserve developments, regulation, tax policy changes,
political risks and other market risks that can impact our strategy, operations,
and results.
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Results of Operations for the nine months ended September 30, 2022 and September
30, 2021
Revenues . The Company had no revenue during the nine months ended September 30,
2022 and the nine months ended September 30, 2021. The Company had no revenue
during the 3 months ended September 30, 2022 and September 30, 2021.
Cost of Revenues . The Company had no cost of revenues for the nine months ended
September 30, 2022 and the nine months ended September 30, 2021. The Company had
no cost revenue during the 3 months ended September 30, 2022 and September 30,
2021.
General and Administrative expenses. The Company incurred $122,287 of general
and administrative expenses during the nine months ended September 30, 2022
compared to $20,924 during the same period in 2021. The Company incurred $38,277
of general and administrative expenses during the three months ended September
30, 2022 compared to $0 during the same period in 2021. The costs increase
related to travel, subscriptions and IT services. The costs increase related to
travel, subscriptions and IT services.
Professional fees. The Company incurred $297,428 of professional fees during the
nine months ended September 30, 2022 compared to $70,912 during the same period
in 2021. The Company incurred $190,978 of professional fees during the three
months ended September 30, 2022 compared to $32,290 during the same period in
2021. The increase in professional fees is the result of the Company incurring
costs associated with consultants and transfer agent costs during the period.
Loss From Operations. The Company incurred an operating loss of $419,715 during
the nine months ended September 30, 2022 compared to $91,836 during the same
period in 2021. The Company incurred an operating loss of $229,255 during the
three months ended September 30, 2022 compared to $32,290 during the same period
in 2021. The increase in net loss is a result of increased professional fees and
additional costs associated with the change in control.
Other Income (Expense). The Company accrued net interest expense of $357,146
during the nine months ended September 30, 2022 compared to $0 during the nine
months ended September 30, 2021. The Company accrued interest expense of
$118,598 during the three months ended September 30, 2022 compared to $0 during
the three months ended September 30, 2021. The company has an unrealised gain on
the revaluation of its equity investments in Novea of $300,000 during the nine
months ended September 30, 2022 compared to $0 for the nine months ended
September 30, 2021.
Net Profit/Loss. The Company incurred a net loss of $476,861 during the nine
months ended September 30, 2022 compared to a net loss of $91,836 during the
same period in 2021. The Company incurred a net loss of $47,833 during the three
months ended September 30, 2022 compared to a net loss of $32,290 during the
same period in 2021. The increase in net loss was a result of increased general
and administrative and professional fees.
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Liquidity and Capital Resources
As of December 31, 2021, the Company had cash of $5,843, with current assets
totalling $5,843 and current liabilities totalling $99,751 creating a working
capital deficit of $93,908. Current liabilities consisted of accounts payable
and accrued liabilities totalling $31,730, related party payable of $68,021
As of September 30, 2022, the Company had cash of $7,735 with current assets
totalling $10,950 and current liabilities totalling $881,719 creating a working
capital deficit of $870,769. Current liabilities consisted of accounts payable
of $6,730, related party payable of $776,989 and other current liabilities of
$98,000.
Cash Flows
Net cash Generated/(Used) in operating activities was $1,892 and ($66,836)
during the nine months ended September 30, 2022 and 2021, respectively.
There were no cash flows from investing activities during the nine months ended
September 30, 2022 and 2021, respectively.
There were no cash flows from financing activities during the nine months ended
September 30, 2022 and 2021, respectively.
Off-Balance Sheet Arrangements
During 2021, the Company entered into a revolving credit commitment with Novea,
Inc. The initial borrowing of the revolving credit loans under the revolving
credit commitments may be an amount up to $500,000. Subject to agreed terms, the
total obligation of the Company to make revolving credit loan in an aggregate
principal amount shall not exceed $5,000,000. The loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate equal to LIBOR plus 5.25%.
The Company entered into a Revolving Credit Facility Agreement (the "RCFA") with
Newpoint Reinsurance Company Limited, an entity owned by the Company's principal
shareholders. The RCFA provides for available borrowings up to $1,000,000 for a
term of three years and an option to roll the facility. As of December 31, 2021
the Company has additional available borrowings of $836,500 after it was
provided $163,500 as a related party transaction for the credit commitment
agreement with Novea. As of September 30, 2022 Newpoint Capital Limited had made
a payment of $167,300 on behalf of the Company as per the credit agreement with
Novea.
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